2017 (3) TMI 1943 - HC - Indian Laws

Refund of amount already deposited in respect of Water Tax and House Tax - HELD THAT - Present case relates only to tax i.e. house Tax and water Tax. Hence the same is not leviable from petitioner in respect to property which is admittedly Central Government s property. Impugned recovery is therefore quashed. The petitioner will make a representation in this regard giving details of deposit of such amount within two weeks from today. In case such a representation is made the same shall be considered by authority concerned and if aforesaid amount has been paid towards tax appropriate order shall be passed in accordance with law and in the light of observations made above and amount found refundable shall be refunded within two months thereafter. It is made very clear that if any amount has been realized or paid by petitioner towards service charge or fee etc. or any amount is due towards that aspect Lucknow Nagar Nigam shall give details of such amount. It goes without saying that observations made above in respect to service charges etc.; it relates to demand already made by Lucknow Nagar Nigam and due against petitioner but if no demand has been made for such contemplated demand amount already realized towards tax shall not be adjusted and it will be refunded. Petition allowed.

Summary

Issues:
1. Jurisdiction of local bodies to levy tax on Central Government property.
2. Applicability of Article 285 of the Constitution of India.
3. Interpretation of Enemy Property Act, 1968.
4. Refund of tax amount paid by petitioner.

Analysis:

Issue 1: Jurisdiction of local bodies to levy tax on Central Government property
The property in question, managed by the Custodian, Enemy Property, is confirmed to be enemy property vested in the Central Government. The dispute arose regarding the demand for Water Tax and House Tax by the Nagar Nigam, Lucknow, and Water Works Department. The petitioner argued that under Article 285 of the Constitution of India, local bodies have no authority to levy tax on Central Government property. The court referred to previous judgments, including Cantonment Board, Varanasi Vs. Union Of India, emphasizing that local bodies can charge service fees but not tax on Central Government property.

Issue 2: Applicability of Article 285 of the Constitution of India
The petitioner's counsel relied on various legal authorities to support the contention that local bodies cannot levy tax on Central Government property. The court concurred with this argument, stating that the property being Central Government's, no tax is chargeable by local bodies. Lucknow Nagar Nigam acknowledged this position and agreed not to charge tax but may demand service fees for services rendered.

Issue 3: Interpretation of Enemy Property Act, 1968
The property in question falls under the Enemy Property Act, 1968, as amended by the Enemy Property (Amendment and Validation) Act, 2016. The respondent, Custodian, Enemy Property, confirmed the property's status as enemy property vested in the Central Government. This legal framework further supported the court's decision that no tax is leviable on the petitioner in respect to the Central Government property.

Issue 4: Refund of tax amount paid by petitioner
The court quashed the impugned bills for House Tax and Water Tax, ruling that these taxes are not applicable to Central Government property. The petitioner was directed to make a representation for the refund of the amount deposited within two weeks. If the amount was paid towards tax, it would be refunded within two months. Any amount due for service charges would be separately addressed by Lucknow Nagar Nigam, ensuring that no tax amount is adjusted against future service fee demands.

In conclusion, the court allowed the petition, emphasizing that no tax is leviable on Central Government property, and provided clear directions for the refund process and future service fee considerations.